5 Colo. Code Regs. § 1002-66.4
Current through Register Vol. 47, No. 11, June 10, 2024
Section 5 CCR 1002-66.4 - IRREVOCABLE STANDBY LETTER OF CREDIT CRITERIAA permittee or applicant may satisfy the financial assurance requirements of subsection 61.13 of Regulation No. 61 by submitting to the Division an irrevocable standby letter-of-credit that conforms to the requirements of section 66.4 . The issuing institution must have the authority to issue a letter of credit and its operations must be regulated by a federal or state agency.
(1) The letter of credit must be effective as of the date of issuance.(2) A letter-of-credit must be in full conformance with Article 5 of the uniform commercial code, C.R.S. 4- 5-101 et seq, as amended. (3) The wording of the letter-of-credit must be identical to the wording specified for a letter of credit in Appendix A. (4) A permittee or applicant who uses a letter-of-credit to satisfy closure costs must also establish a standby trust fund, unless an alternate instrument has been established by the state of Colorado to directly receive monies, or the permittee or applicant has previously established a trust fund under section 66.5 . Under the terms of the letter-of-credit, all amounts paid pursuant to a draft by the Division will be deposited by the issuing institution directly into the standby trust fund, or trust fund, in accordance with instructions from the Division. This standby trust fund must meet the requirements of a trust fund (section 66.5), except the following provisions are not required: (a) Updating of Schedule A of the trust agreement to show closure costs; and,(b) Annual valuations as required by the trust agreement; and,(c) Notices of nonpayment as required by the trust agreement.(5) Where a standby trust fund is established in accordance with subsection 66.4 , the wording of the standby trust must be identical to the wording specified in Appendix C and the standby trust must be submitted to the Division concurrently with the letter-of-credit.(6) The letter-of-credit must be accompanied by a letter from the permittee or applicant referring to the letter of credit by number, issuing institution, and date, and providing the following information: the name and address of the housed commercial swine feeding operation facilities, and the amount of funds assured for closure costs for the facilities by the letter-of-credit.(7) The letter-of-credit must be irrevocable and issued for a period of at least one (1) year.(8) The letter-of-credit must provide that the expiration date will be automatically extended for a period of at least one (1) year unless, at least 90 days before the current expiration date, the issuing institution notifies the permittee or applicant and the Division by certified mail of a decision not to extend the expiration date. Under the terms of the letter-of-credit, the 90 days will begin on the date when the permittee or applicant and the Division have received the notice, as evidenced by a certified mail return receipt.(9) The letter-of-credit must provide that the issuing institution waives all rights of set off or liens against the letter-of-credit.(10) The letter-of-credit must be issued in an amount at least equal to the closure costs, less any amount covered by another financial assurance instrument(s).(11) Following a determination that the permittee has failed to perform final closure or post-closure or corrective actions in accordance with the current, approved financial assurance plan and other permit requirements when required to do so, the Division may draw on the letter-of-credit.(12) If the permittee does not establish alternate financial assurance that meets the requirements of subsections 61.13 (h(iii)-(iv) of Regulation No. 61, within 60 days after receipt by both the permittee and the Division of a notice from the issuing institution that it has decided not to extend the letter-of-credit beyond the current expiration date, the Division will draw on the letter-of-credit within 30 days prior to the expiration date. The Division may delay the drawing if the issuing institution grants an extension of the term of the credit. During the last thirty (30) days of any such extension the Division will draw on the letter-of-credit if the permittee has failed to provide alternate financial assurance that meets the requirements of subsections 61.13 (h(iii)-(iv) of Regulation No. 61.(13) Reimbursements- If the value of the letter-of-credit is greater than the closure costs, the permittee may submit a written request with appropriate documentation justifying the request to the Division for the release of the amount in excess of the closure costs. (a) If the Division concurs with the accuracy of the justification, within 60 days after receiving a request from the permittee for release of letter-of-credit funds, the Division will instruct the trustee to release to the permittee the amount in the letter-of-credit fund in excess of closure costs.(b) If the permittee substitutes other financial assurance that meets the requirements of in subsections 61.13 -(iv) of Regulation No. 61 for all or part of the letter-of-credit fund, the permittee may submit a written request to the Division for release of the amount in excess of the closure costs in the letter-of-credit fund covered by another, approved financial assurance instrument(s).(c) After beginning partial or final closure, post-closure, and/or corrective action care of a facility(ies), a permittee may request reimbursements for closure, post-closure, and/or corrective action care expenditures by submitting itemized receipts to the Division. (i) The permittee may request reimbursements for partial or final closure, post-closure, and/or corrective actions only if the remaining value of the letter-of-credit fund is sufficient to cover closure costs for the operation.(ii) Within sixty (60) days after receiving receipts for partial or final closure, post-closure, and/or corrective action care, the Division will instruct the institution that issued the letter-of-credit to make reimbursements in such amounts as the Division specifies in writing if the Division determines that the expenditures are in accordance with the approved financial assurance plan, or otherwise justified.(iii) If the Division has reason to believe that the closure costs over the remaining life of the operation will be significantly greater than the face amount of the letter-of-credit fund, it may withhold reimbursements of such amounts as it deems prudent until it determines that the permittee is no longer required to maintain financial assurance for final closure of the operation. If the Division does not instruct the institution that issued the letter-of-credit to make such reimbursements, it will provide the permittee with a detailed written statement of reasons.(14) The Division shall agree to termination of a letter-of-credit when the provisions of subsection 61.13 of Regulation No. 61 have been satisfied.